Mortgage Income Multiples Vs Loan To Value Can you get as much as you like with a big enough deposit?
Posted 09 May 2012 - 02:15 PM
Posted 09 May 2012 - 02:34 PM
Cool That means price will crash soon,.
Posted 09 May 2012 - 02:38 PM
I'd hazard a guess at around 50% - i.e. the maximum 'conceivable' drop in value... BTW I do hope you're joking...
Posted 09 May 2012 - 02:39 PM
I've never tried to disuade anyone from buying on this forum, especially if they feel comfortable with the finances, but in your case I'll make an exception. Don't do it!
Posted 09 May 2012 - 02:44 PM
Posted 09 May 2012 - 02:51 PM
suggest you speak to an independent financial adviser.
I recently applied for a mortgage.
with perfect credit scores, a 75% deposit, regular earnings on PAYE, and minimal outgoings I was told the most I could borrow would be about 5 times joint income.
10 times would be fairly absurd, as I'm sure you're aware. a 25 yr repayment mortgage at 5% rates would be account for over 70% of your pretax income. that is a lot.
This post has been edited by the flying pig: 09 May 2012 - 02:52 PM
Posted 09 May 2012 - 03:00 PM
It only takes a few....
The Funding for Lending Scheme (FLS) is stealing from savers to make them pay for crimes by bankers. Via lower interest on savings, all the bank fines for PPI, LIBOR and interest rates swaps are now being paid by savers so that bankers can keep pocketing bonuses.
"We need to make a really big change: from an economy built on debt to an economy built on savings" - David Camoron Jan 2009
"Printing money is the last resort of desperate governments when all other policies have failed" - George Osborne Jan 2009
- So what do Camoron & Osborne do? Print money and leave interest rates at 0.5% when inflation is over 5%
If it is asserted that civilization is a real advance in the condition of man -- and I think that it is, though only the wise improve their advantages -- it must be shown that it has produced better dwellings without making them more costly; and the cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.
I want to tell you my secret now.... I see debt people
Posted 09 May 2012 - 03:39 PM
And let's face it, unless you're paying less than 5% then you wouldn't be bringing in enough each month to make the repayments on a 5x loan.
Right! we should not be fooled into thinking 5% mortgages are cheap either. A normal rate over 25 years might easily be 7% and higher. We have inflation locked in by QE and costs are rising around the world and the increases are becoming more pressing.
Posted 09 May 2012 - 04:44 PM
Have you consider buying a smaller house / a less posh area ?
Bank has a duty to ensure that you are able to pay back the loan (FSA rule)... so affordability first, LTV second.
Posted 09 May 2012 - 04:52 PM
Less can be more.
Posted 09 May 2012 - 05:00 PM
Imho - if your mortgage is anything over a MAXIMUM of 3.5 x your REAL, NON-LIAR income --- you are fooling yourself... It is THE MAIN REASON we are where we are today......
We are living in a world completely tainted - POISONED - by the effects of LIAR LOANS - which have fraudulently inflated all local prices - and - which have forced EVERYONE ELSE in all localities/neighbourhoods to effectively take out a LIAR LOAN in order to match/keep up with their local fraudulently inflated "prices" resulting from the initial LIAR LOANS taken out......
The poison in the mud is, richly & slowly leaching out its misery on us all..... We are living with the consequences......
This post has been edited by eric pebble: 09 May 2012 - 05:04 PM
HERE IN THE UK: THE UK SUB-PRIME CATASTROPHE - IT IS NOT ONLY IN AMERICA!! THE UK LIAR LOAN INDUSTRY - Source of FICTITIOUS "MONEY", and the principle driver of the House "Price" Pyramid/Ponzi Scam & Bubble, the "Credit Crunch" - and an unacknowledged major part of and cause of the ensuing Worldwide Financial Crash.
The following was reported in a superb documentary in late 2003 - This is now over 10 years ago!! Since then shamefully little has been done here in the UK by journalists/broadcasters to dig down deep on this story - a vast elephant in the room: Why? If you're a serious journalist - here's your story - start investigating - it is the biggest financial scandal of all time:
THE ARTICLES BELOW ARE FROM AS FAR BACK AS 2003!!
Mortgage customers 'urged to lie' - All this was way back in 2003 by the way!!
Housebuyers are being encouraged to break the law in order to obtain huge mortgages, the BBC has discovered. Brokers, and even banking staff, have been telling buyers to lie about their incomes to get bigger and bigger loans. And these underhand tactics could also be the reason why house prices have gone on rising for so long.
CLICK HERE - http://news.bbc.co.u...ess/3222053.stm
"Could you believe that a bank would invite customers to defraud it? It may sound incredible, but that is what some of Britain's biggest mortgage lenders have in effect been doing."
CLICK HERE - http://news.bbc.co.u...ess/3478635.stm
The BBC Money Programme uncovers massive mortgage fraud [2003!]: BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents and financial advice groups advising customers to break the law and lie about their incomes to get massively bigger mortgages. And it shows how the illicit cash raised by this method has been pouring into the housing market, boosting prices and leaving many people risking financial ruin.
CLICK HERE http://www.bbc.co.uk..._mortgage.shtml
AND READ THIS: - http://www.housepric...howtopic=152508
WATCH THE VIDEO OF THE 2003/4 DOCUMENTARY HERE: - http://www.youtube.c...d&v=vT1UnGS91BY
Click on parts 2 & 3 as you go along watching this video.
AND WATCH THE LATEST VIDEO OF LIAR LOANS STILL IN ACTION HERE in 2008 - http://news.sky.com/.../20080641317257
Posted 09 May 2012 - 05:40 PM
Yep, income multiples apply regardless of the LTV.
"The time to buy is when blood is running in the streets" Baron Nathan Rothschild
Posted 09 May 2012 - 07:16 PM
LTV do not matter.
They care - at last! - about your ability to service the mortgage debt not whether you can do the financial equivalent of doing 70mpn in a Robin Reliant - i.e. wind behind you, down steep hill for 5 minutes.
You're a freelancer. You're too risky. You will struggle to get anything beyond 2 times certified income with 60% deposit. And you'll pay over the odds for it.
In general, if the cost of the mortgage payment - interest + capital - is more then 30% of your take home then you'll be classed as high-risk.